Major crypto exchange Gate.io has been surrounded by rumors of bankruptcy, causing considerable concern among investors. These began to circulate in May, with the troubled cross-chain protocol Multichain at the center of the issue. Gate.io has since taken a stand against the rumors, threatening legal action against those responsible for spreading them and causing panic among investors.
The connection between Gate.io and Multichain led many to question the former’s solvency. Multichain’s technical difficulties began on May 24 when a node issue caused transaction delays. The inability to contact the protocol’s CEO fueled rumors that the leadership had been arrested and over $1.5 billion in smart contract funds had been seized by Chinese authorities. In response, Gate.io disputed the rumors and issued a statement on May 31, stating that their operations and withdrawals were functioning correctly.
Gate.io first launched in the Cayman Islands in 2013 and has since expanded to Hong Kong, Turkey, and Dubai. Ranked among the major exchanges, its 24-hour trading volume amounts to around $700 million, experiencing a growth of 138.77% within the last 24 hours. The native token, GateToken (GT), currently trades at $4.29 but has seen a decline of 9.6% over the last week, as per CoinGecko data.
Multichain’s continued difficulties led other exchanges, such as Binance, to suspend deposits for ten bridged tokens on the BNB Smart Chain, Ethereum, Fantom, and Avalanche blockchain networks on May 25. To add to the uncertainty, Fantom Foundation removed 449,740 MULTI ($2.4 million) from liquidity on SushiSwap due to transaction downtime.
However, recent events hint at a possible recovery for the beleaguered protocol. On-chain experts confirmed that some Multichain cross-chain bridges were back online and running transactions on Monday. Additionally, Multichain’s router2, a vital part of the bridge, is now operational, according to VP Tung Dinh and an administrator.
This news has positively impacted Multichain’s native token MULTI, enjoying a 12% increase in value, currently trading at $4.25. Founder of the Web3 knowledge graph protocol 0xScope, Bobie, confirmed the functioning status of Zksync Era, Kava EVM, and Avax C-Chain services, sharing screenshots of transactions on these platforms as evidence.
As the situation unfolds, the impact on Gate.io’s operations remains to be seen. Nevertheless, the threat of legal action against rumor spreaders demonstrates the seriousness with which the exchange is determined to protect its reputation and reassure investors.
Source: Cryptonews
